Rags to riches stories in the business world are not uncommon. Certainly it is always inspiring to read stories of people who have a vision, make it happen with few resources, and defy the odds by building an empire. In part because we like heroic narratives. Tales of people who elevate this success by sharing those profits with the workers who helped make it all happen are less common. This is precisely what Chobani founder Hamdi Ulukaya did recently when he announced that he will give present and future full-time employees shares in Chobani. This equates to roughly 10% of the value of the company growth when he sells the company or takes it public. (Chobani is currently valued between $3 billion and $5 billion). With all 2,000 employees set to have a stake in Chobani’s future, this is higher ambition leadership at its best.
So why DID Ulukaya do this? He decided it was the right thing to do and then simply did it. In fact, this is really all it takes to embrace higher ambition leadership. And for Ulukaya it is important to note that this is no free giveaway. As he stated in a letter to his employees, “This isn’t a gift. It’s a mutual promise to work together with a shared purpose and responsibility. To continue to create something special and of lasting value. “To date, shares the shares distributed to employees would be worth an average of roughly $50,000. The move is brilliant and wonderfully simple.
To provide some context, some 11 years ago, Ulukaya used a Small Business Administration loan to purchase a defunct Kraft Foods yogurt plant in New Berlin, New York believing that the market was ripe for a thicker, creamier, less sweet version of what we in the United States were accustomed to — Greek yogurt. It was a gamble that paid off. A mere seven years after purchasing the plant, Chobani became the leading yogurt brand in the world.
Now highly successful, Ulukaya is sending an underlying message to the world: that we can all do better. Certainly one sure fire way to increase prospects for further success is to provide employees a financial stake in the company’s future. This is much larger than merely boosting valuation, however. It’s about ownership. It’s about pride. It’s about humanity. In the words of one employee, “I could hit the lottery and I’d still come to work. I’m just proud. I’m proud we’ve done everything we can. I never even thought about owning a piece of the company.”
Ulukaya isn’t the first executive to make a dramatic employee-centered move: Aetna CEO Mark Bertolini announced last year that he would increase the wages and benefits of frontline workers as a strategic move [internal link to http://www.higherambition.org/aetnas-wage-move-potential-game-changer/]. Just last year, Dan Price, Co-Founder of Seattle based credit card processor Gravity Payments announced that all of his 100 employees were to receive a minimum salary of $70,000. He made this decision because he concluded this to be the minimum salary needed to adequately secure them from financial hardship. Price figured that if he was financially set for 10 plus years, so should his employees be able to live beyond paycheck to paycheck. In 2014, Starbuck’s Howard Schultz announced that all of the company’s employees would be eligible for college tuition [internal link to http://www.strategy-business.com/blog/The-Importance-of-Putting-People-First].
It is encouraging that higher ambition mindset has become increasingly closer to a norm. As a new generation comes up through the ranks, profits are increasingly intertwined with doing what is fair and just for the entire team. Like Ulukaya, it isn’t a choice. It’s the only choice. Ulukaya’s story is the epitome of corporate good and we are convinced stories like his will increasingly become the norm. We look forward to keeping you apprised.